40% of African Countries in Debt Crisis – TheNigerialawyer

The Managing Director of the International Monetary Fund (IMF),
Kristalina Georgieva, says 40 per cent of African countries are in
debt distress.

According to The Cable, Georgieva described Africa as a
continent of opportunities and one with many troubles, noting that
the focus was to help countries have sound macro-economic policies,
improve the investment climate and show it to the rest of the
world.

“Africa is a continent of opportunities and what we are looking
for is for this opportunity to be harnessed to the maximum. It is
also a continent with many troubles; so, we have to be mindful of
these risks especially security risks,” she said.

Commenting on the debt levels of countries, the newly appointed
IMF MD said, “Are we worried about debt levels in Africa? Yes,
because 40 per cent of the countries have gone into debt distress
levels.

“In some cases, we are concerned about that but in other cases,
we see that investment is going to pay off over time.

“Take the case of Kenya, we advise Kenya to be more cautious in
building debt but we have seen good macroeconomic policy in
Kenya.

“In cases where debt is dangerous like Zambia, we do say you
need to get a handle on your debt. In Ethiopia, we say you need to
renegotiate some of your debts because it is non-concessional for
things that should be on a concessional basis.

“One has to remember that debt on its own is not bad. It is bad
when it goes with the wrong things and when it goes with the speed
that the economy cannot handle.”

Georgieva said countries that were experiencing higher growth
rate had done so by borrowing for investments that could generate
growth and eliminating red tape for local and foreign
investors.

She said the IMF would hold a ‘concentrated’ meeting with
African leaders in December to discuss debt sustainability.